Is It Time To Dump Your Property Manager?
We have all had a bad experience with a property manager. But when is the right time to let one go? Alternatively, when is it the right time to fire yourself as a property manager and hire someone else? These are the questions we address in this video while pulling from our own personal experiences for real-life examples. --- Transcript Emil: Everyone, welcome back for another episode of The Remote Real Estate Investor. My name is Emil Shour and my co hosts are, Tom: Tom Schneider Michael: and Michael album. Emil: And on today's episode, it's going to be a little bit less rosy. But we're going to be talking about what happens when you have a property manager that isn't working out. Essentially, how do you break up with your property manager? All of us have gone through this experience and so we're going to try to impart some knowledge on you guys. So let's hop into this one. Alright guys, before we get into this episode, I want to give another listener shout out. So this is from longtime first time in a car who left us a review on Apple podcasts said love this pod found this by following Michael on Twitter, and love listening and learning a lot. The hosts are also very friendly and engaging on Twitter answering questions, and suggesting pod episodes for subjects. Great guys and just overall helpful for learning about real estate investing. So this is a shout out to us specifically, Michael well done. Michael. What's your handle? Michael: Thank you. Thank you. It's really complicated. Remember, it's @albummichael. Tom: Oh a reverse one nice Michael: Yeah, but I think it just got assigned to me. I don't like I don't know a meal got me hooked on Twitter. Emil: You probably picked it I don't think they assigned it or maybe I don't know maybe when you put your name and… Michael: If I had picked it would have been like cool surfer Guy 23 Emil: They probably just making a suggestion for you so that it's like really easy when you sign up right? So it's not the thing too much. And you can check it very well. Michael: That could very well be. But I was pretty overwhelmed with the whole thing to begin with. So I was like, whatever just basic is fine. Tom: Emil, you're pretty active on Twitter as well. Right? What's your handle? I'm at a meal. Sure. I used to be a lot more active. I used to post regularly I go on from time to time Twitter can be a fantastic place to meet people It can also be a wormhole place that just sucks you in for hours and you're like where the time go. So I tried to moderate I deleted off my phone now I just have it on desktop. Use it a little bit less. But yeah, I'm on there. Michael: Tom. Aren't you on there too lurker lurker 27? Tom: I'm a lurker. Exactly. Yeah. wallflower white noise22. No, TSchneido is mine. But yeah, not not super active, more just lurker. Michael: I had a call with someone from Twitter the other day, and it's a pretty amazing place to network. Like you're saying Emil. I've had conversations with some really amazing people have been able to network pretty amazingly, for lack of a better adjective when used properly. I think it's it serves a really cool purpose. Emil: Totally. And we even had one of those virtual meetups. I think it was in like November, December with a couple of us on Twitter. Yeah, that was fun, too. Michael: Super fun. Emil: Totally. All depends on how you use it. You can, you know, Michael: Use it for good or evil. Emil: Exactly. Anyway, just want to encourage people leaving us reviews, ratings, comments, whatever. We'll give you guys a shout out on future episodes. So wherever you listen your podcasts, leave us a comment or review. And we'll give you a shout out future episode. Nice. Alright, guys, this is a topic a little near and dear to my heart, because I'm going through the process right now. But you know, when you hope that it never comes to it. But before we even hit record I asked you guys has have all of you gone through the experience of having to fire a property manager and go to a new one you said yes. So I think it's just part of the journey of being a real estate investor doesn't always work out on the first try. You gotta keep trying. That's been your experience as well huh guys? Michael: Yeah, I think it's kind of like, people liken it to dating. But I think that's probably the wrong wrong analogy, because there's a lot more business venture tied into, you know, dating around different property managers as opposed to a spouse. But yeah, I mean, it doesn't always go according to plan. And there are people that are bait and switch, and you evolve and change as an individual as an investor. And so if your property manager can't do that with you, then sometimes you just have to part ways as friends for no reason other than you outgrew them or not working anymore, or whatever. So I think people think it's really this bad thing, and you don't want to do it, and you don't hurt anybody's feelings. And at the end of the day, nobody's going to look out for you as well as you are. And so you've got to make sure that you're taking care of and so doing, of course, not stepping over people not taking advantage of people doing things in an ethical way, but also ensuring that the people you're working with are also treating you ethically the way that you would be treating them. Tom, your thoughts on breaking up property managers in general? Tom: Yeah, you know, nothing. What's fun about this type of business is there's not a ton written in stone. So you know, if you need to iterate if it's not working out, like it's, it's not a big deal to switch them but within this episode, we're going to cover a lot of important ways to think about it ways to go about it. As you know, one thing is, you know, the grass isn't always necessarily greener on the other side. So like in leaving a property manager, you need to know you got to have a strategy on what is next in place, depending on whatever cycle your property is in, be it occupied or vacant or whatever, you know, you need to unless you're self managing it which is something that I know we are not into as remote real estate investors, there needs to be operational ability in between that transition and a clear path ahead. Michael: So but Tom, you bring up a good point that I think it should be given a lot of consideration. If you're self managing, there's definitely a point where you might want to fire yourself and go hire a property manager, you just because if you're flipping it around yet that there's something that's not working out, you could totally fire yourself. Tom: Good point, Michael, you could be self managing. And the process of moving to a professional property manager is firing yourself for a new property manager. So I have a friend who is about to fire himself as a property manager. So he bought a property kind of at the trough of in the Bay Area, lived in it a couple years at now has two kids moved further into the suburbs. So he has this other house over in Berkeley. And he's been managing himself and he's like him, his wife, or like, I'm over this, I want to fire myself as the property manager, we're busy doing other stuff. And some advice that I gave him is to time it out on the leasing. Like, if he doesn't mind doing one more round of leasing, he could save a ton of money because property managers they make a lot of their money on the leasing because they'll you know, collect like a full month's rent. And we're talking about Berkeley in this like this, like single family house, I don't know the exact rent it is, but I would imagine it's probably like 4000 5000 bucks like and that's a massive saving, if you don't mind doing that one lease and then handing it off to a property manager, that could be a great money saver on your way out the door of bringing on a new professional property manager could tip there, Michael: He should also look into Hemlane friend of the podcast friend to roofstock as a maybe interim solution, because if property manager starts in 10% of rent collect, that's 500 bucks. Tom: Some real dough, the leasing costs. So if you are finding yourself as a property manager, think about what cycle you are, it's already occupied. And there's not really much of a difference. Like I wouldn't recommend you the direction. But if it's vacant and right rent ready and like about to be leased, like you, you might as well put that extra little bit of effort in and just complete this leasing cycle. But no shame. If you don't want to do it, you'll want to just pay someone else to do it. So that would be my 10 cents to fill to make to this episode. Good luck. Michael: Nice. Tom: Alright, Emil pot on your head right now. Emil: Coming back, come back bringing it back. We've all had to fire somebody. I'm curious, do you think it was that you didn't properly vet them up front? I've talked about this on the podcast a lot. property managers do this all day. They get like inquiries from owners all the time. They know how to they get the same questions over and over, they learn how to answer them. This is what I believe has been the problem. It's very hard to figure out on the front end, if they're going to be good. Yes, you get references, you talk to people, but a lot of the time it's you kind of just test them out and see how it goes. And so I'm curious, do you think it was you didn't properly vet upfront? Or what do you think led to you not choosing the right property manager? Tom: Go ahead, Michael Albaum. Michael: For me, I did a lot of vetting on the front end with this particular property manager, I asked around for references, recommendations, because I just couldn't find any good property managers on my own. And this person actually came recommended from several different sources, none that I knew personally. But just through networking, they came up and they were a member of NARPM, which is the National Association of property managers, I think is the acronym for that. And then talking to him, he was great. He had a business setup and you manage properties. And it was very great to talk to. So I did like I went through all the checkboxes and steps that I would recommend anybody go through then once I closed on the property, that's when things started to get super fishy. And I should have known sooner rather than later that like this wasn't gonna be a good fit. But it wasn't until like I had literally closing the property that day. And they were going to go collect keys from my agent that things started to go kind of sideways. And I was like, oh, like, I don't really have a good backup plan. At this moment. I'm like, I better see this thing through. Like my agent called, I put my agent and the property manager in touch and like, Okay, cool. We're gonna do a key handoff closings happened, this is what we're gonna do. And property managers like, Oh, can you meet me in like the parking lot of a grocery store? And we'll do a key handoff. He was like, What? No, like, I'll come to your office. And they were like, Oh, no, like, just meet us over here. And like, no, why can't we meet you at your office or come to my office will do this, like in a safe, secure location. And it was like No, and nobody likes talking and returning his phone calls. I'm like, What is going on? So my agent held on to the keys he didn't give them give us just gonna give them to these people. And so I did some research. And it turned out that this management company didn't even have an office in the town in which they were managing these rentals, they were doing it from a distance, and I'm like, I'm doing the remote thing. Like I'm paying you to be on site, that that's not how this is gonna work. So just a bunch of things went sideways after that, but that was like the first indication that I should have been listening to my gut that hey, this is probably not going to work out. I can get into some of the other details about why they ultimately got fired. But I think people have pretty good intuition, especially when it comes to other people. And I think you got to listen to that little voice inside you that's like, hey, something just isn't quite right here. Emil: I've been laughing the whole time because this is exactly what happened in my most recent situation that you know, I'm going to be talking about in this episode. It was right when we closed all these like question marks started coming you know, they're saying all the right things and then we close and all this funny stuff starts happening and same thing it was like gut feeling like oh no, what am I getting into? You know, you kind of got you're like, Alright, I've done all this betting let me just see it out and see if it works out and like probably nine times out of 10 it's not gonna work out if it's bad from the get go. Tom: Have you had bad feelings intuition, and it like ended up being okay before? Emil: No. That's what I'm saying like nine times out of 10. Michael: I'm pretty sure with a meal kind of with regard to contractors and property managers accurate, either I've been accurate or my wife's been accurate. I mean, she's got a really good feel for this kind of stuff, too. So she often overhears a lot of conversations like Michael had, like that doesn't I don't have a good feeling about this. I'm like, No, no, it's fine. It's fine. It's fine. And then it ends up being horrible. Like, Oh, my God, like so stupid. Tom: Yeah. Was there anything specifically you would have done in the vetting process that you would have done different? Michael: Maybe would have called more of their references, but like, I did that, and I spoke to some people so tough to say maybe maybe would have had my property, my agent, go meet them face to face and say, Hey, you know, we got to do a while I'm having my agent screen for property managers. Let's Let's, you know, get them involved. Tom: My agent needs to smell you. Michael: Yeah. Right. Right. So make sure you shower. Emil: Physically smell you, the tough thing about references is like, they're telling you people that they obviously have a good relationship with, you know what I mean? So it's like, I get references, and you should check them. But I don't know, man, his references are tough, they can just send it to somebody that, you know, is really buddy buddy with them. And you're not going to get an honest assessment. Michael: Yeah, I mean, these people even had good Google reviews, like, good ratings and stuff. And I was like, that checks out. So you know, yeah, Tom, to your question. I don't know if I would have done anything differently. Tom: So for my breakup story, I definitely would have done something differently. I feel like like, this is where we should okay. And now go into commercial, you know? Michael: And stay tuned to hear about tava differently. Tom: Yeah, exactly. None. Okay, so what Tom would have done differently. So in my scenario, this is a property that was in Jacksonville, Florida, I went to the exercise, talk to the property manager got their operating metrics got there, talk to them about their standard operating procedures, got references. And I find out after post ownership that my property is in a satellite office that they like, just launched, they had one person totally overwhelmed, and didn't do a good job managing the property. And what I mean by that, I guess, this is my story. So I'll just just continue to Michael: Everybody else Shut up. Tom: This is my story, stop talking. I'll just continue, Emil: No one is talking. Michael: It’s all in your head. Tom: So I have my property that's in Jacksonville, their main offices in Orlando, they have a single person working that totally overwhelmed. So one day, I get an email from the satellite office property manager asking me how do they want to deal with the security deposit that needs to be returned? I'm like, What the heck are you talking about? Why would a security deposit need to be returned. So as it turns out, the tenant was having all these issues with the property managers, I never knew about it until the tenant moved out, and then the tenant moved out. And now my only understanding is that they've already moved out, and I need to pay them back their security deposit, like just an absolute mess, absolute mess. So anyways, I what I would have done very differently is, Hey, is this office in a satellite office? And how long has the satellite office been running? And I think another way to get to this is to look at the property that I want them to manage, give doing, like, kind of a portfolio overlay of like, what are the properties in their inventory? Do they have a lot of like, kind, you know, similar single families, similar Bed Bath count, similar, all that kind of stuff? And then perhaps some, you know, operational metrics around that, like, okay, what's your occupancy, like, in that area? And you might feel like you're being like, over the top and asking these questions, but Tell you what, it is so much easier to do, like be a little bit annoying, upfront and asking a lot of questions than having to deal with, you know, changing property managers, just as that's, you know, better to, you know, measure twice, cut once. Yeah, that's, that's the order you want to do it in, by kind of going over the top. So that's my little story about how I learned about the property manager being bad. And then firing the property manager. So anyways, I would have done that differently. Michael: So yeah, no, I was gonna ask the one person in that satellite office where they doing the leasing and the management and accounting, but they kind of a one person operation. Tom: I'm not totally sure. I don't totally I know, I know that they had like staff departments, like in their main office that was in Orlando, or they had different people, but I think they were just starting that new market and they they didn't have like the market launch done. Like, you know, it was building the train as it's going down the tracks and like I get it, like that's important for businesses to do that to grow. But it's like, I don't want to be on that train. While it's going down the drags. Emil: You want somebody else to be the guinea pig. Tom: Exactly. I want somebody else on the train. Well, yeah, it's doing that. Michael: That's a great analogy. Yeah. So how did you end up firing them? Tom: I found out that this was happening and I'm like, I was really confused. So then I talked to my original like, account salesperson that I talked to who's like probably like their, whatever, Director of Sales or whatnot, and like, Hey, this is this is not working out. You know, I just found this out and they totally got they're like, okay, yeah, Tom, that makes sense. You know, let us know you know what you want as kind of the next steps. And I did this via email. And we could talk a little bit more about different, you know, methods of having this communication. But I found another property manager that I had for another few years, I ended up selling the property and doing a 1031, which was awesome. But I transition to the new property manager. And the last little kind of kick in the pants learning experience on this is they had a freakin breakup fee where I had to pay them money to cancel the property management agreement early like I think it was like in the contract, which I didn't read through enough which now I do, it stated that the contract was like supposed to be for like, I believe, like, two years or four years or something. And it was like $1,000 to break up so is like the biggest like insult to injury. And it's like, wow, I do not support your business at all, like you are just all around that bad. Bad. Emil: That's a big tip read those agreements, it like you got to read them line by line. And if you have any, like issues with things, call them out. Like I've negotiated certain line items with property managers, like make sure you call them out, read that thing. Top to bottom. So important. Tom: Yeah. And don't feel like it's just some tips in reading the property management agreement. They're pretty well organized legal documents. So find the sections related to what's relevant. So like breakup, like fees, like all this, you know, there's going to be some details around like, some stuff that isn't probably as important, their longish documents, but find the specific sections in the documents and read through a fine tooth comb those sections. Yeah, that anything that has to do with you know, your relationship with that person. Emil: And fees in general, right. Like, I remember one property manager, they would I just seen this multiple times now, where if you sell the property, while it's under their management, they charge you like, 1% of the sales price or something like that. So anything, anything related to fees or costs, Tom: It's garbage. Emil: So you should really yeah, like focus in on those and and make sure you ask questions around those. Tom: That's what you want to bring out the fine tooth? Go ahead, Michael. Tom: Yeah, just kind of a tip on that, too, is like Camille, you were saying so much of this is negotiable. So don't feel like Oh, man, this property manager has something in their contract. I don't like I'm going to go find a new property manager. No, you should talk about it. Ask questions. Something that I asked for in all of my property management agreements is a property manager guarantee. So if they have to evict somebody in the first six months of their lease, they place a new tenant for free, and don't charge me a placement fee. So that way they put their money where their mouth is they're not just getting people in there churning and burning. And they're like, yeah, we're happy to do that. Because we're going to, you know, work a management company. So I think that there are things you can ask for. And you don't know, unless you ask, I know, there was a student, the academy I was chatting with. And he's like, oh, the management fee is too high doesn't make the numbers work. And I said, asked for a lower fee. And he said, Okay, and then he did. And then they said, okay, and he's like, cool. The numbers work. And I love the manager. It's all great. So you don't know what to ask him. The worst they can say is No. Tom: Is it a Wayne Gretzky, Michael Jordan, you make zero the shots you don’t try? Michael: You miss 100% of the shots you don’t take. It was Gretzky? Tom: That's right. It's great. So yeah, take shots. Michael: We should have him on the pod. Tom: Yeah. Emil: You think he'd come on? He'd be good. Michael: He'd be talking about mindset. Emil: Yeah. Tom: Emil, so I talked about my breakup. Why don't you go into a little more detail on? What is a fresh experience? wound everyone to put it fresh wound? Emil: Yeah. Yeah. All right, I can kind of give the story and I'll paint the full picture for you guys. So I had a property, man, Michael: We want names now. Emil: Just Hey, I wish we could drop names, I want to say spare people who are looking in the same market as me. Okay, so I have a property manager in St. Louis, who I just transitioned over. And so for me, like I mentioned, when I chatted with the owner, things are great Yelp reviews, Google reviews. And usually property managers have terrible Yelp and Google reviews because, you know, tenants get upset about one thing, and they go leave reviews on these platforms. So the fact that they had great Google reviews, great Yelp reviews, I was like, oh, man, this must be a great sign. Like, no property managers ever had that. So everything was good, I had a good rapport with the owner. And then we took over, and all of a sudden, it was like, communication became terrible with their team, like, once it got from owner to the team, everything just sucked after that point. That's kind of where I've found the issue is like, I'll talk to the owner. They're sharp, they're on it, but their team just can't deliver on all the things that they kind of promise. And so like, poor communication, I have to follow up, there was one thing one small thing, I had a follow up like four times via email. And for me, that is like one of my giant red flags is like, if I have to follow up with the property manager multiple times to like, get information or whatever that is just long term, that's not gonna work for me, I like don't want to micromanage. It's not my goal. It's just in the beginning, I need to develop a little trust with you, right, I need to know like, if I, if we talk about something, you say you're gonna do it, I can trust that you're gonna follow through. So in the beginning, I'm going to be on it just to make sure that it's happening. And so like, it wasn't happening. And then I started getting my monthly statements. And they were nickel and diming me for silly things like talking to the tenant for 15 minutes on the phone, like they were charging me for that. And I was like, No, this is 0%, the kind of company I'm gonna be working with. And so those were the two big red flags for me. And I love for you guys to chat about yours, but like nickel and diming, right. So like, yeah, they have their property management fee and there's nowhere in the agreement that tells you they're gonna nickle and dime you, you just see it on your statement, right? That they're charging you for like everything, which is ridiculous and just poor communication and not being able to trust that like when I send something or they say they're going to do something that it gets done. So those are the big red flags that came up for me. Tom: Emil, how did you broach the breakup conversation? What was your? Emil: Yeah, so for me, it was like, I think it was like a month and a half, two months in, I had tried to remedy it. Like I had a conversation with the owner, right? He tried to like make it better. And it was just the same stuff, poor communication. And I just like, just felt like, again, you know, we talked about the beginning episode, like once trust is broken. Once you have a bad feeling in your gut, it's very rare that the ship turns around. So think was like two months in I just mentioned, like, hey, I've identified another property manager, like, I just don't think there's a good fit for either of us, you know what I mean? And I'd like to transfer service, you know, just really basic, I didn't like grilla mercy, you get, you know, I wasn't harsh, or just like, hey, this isn't really the right fit for me, I'd like to transfer over. Emil; There was a three month minimum as part of my contract, so I had to stay with them for three months. So we finished out another month, and then they transition to the new property manager, you have to give them 30 day notice most property managers require a 30 day notice. And this one required a minimum of three months service. So once that was up, we transferred over to a new property manager, which was the end of February. So now it's under new property. Tom: Was this new property manager? Did they come out of the blue? Or were they part of your original vetting? Emil: They were they like, you know, the bridesmaid. They were they were part of my original vetting. And it was like, to me, the person who was next in line, right? It wasn't the person who I was interested in working with, after the one I had gone with, but didn't like I saw these like nickel and dime charges. And so like, I wrote an email to the other property manager and just asked them, like, hey, how much would you charge me for this, this and that. And he was like, we would never charge you for this this. I was like, Okay, fantastic. And so we I just picked up the conversation with him, we had to negotiate some some stuff. But I really liked that he's much more involved, they're a little bit smaller of a property management shop. And I go directly through him for a lot of things. So like that relationship that I've developed with the owner, I get to maintain that for now. So that is part of the reason I liked this property manager and wanted to test them out next, Tom: It's a funny psychology thing where you probably, you know, went to the other one because they like, you know, we're bigger and appeared to have like a bigger footprint. But it's like, interesting psychology thing. I don't know, I fall into that trap before too. Emil; It could go the other way too, though, right? If you're a bigger shop, you may have better processes in place and operations and all that. But smaller, you may get more of that, like personal touch, like being able to call the owner and so I'm trying it out. We'll see how it goes. And hopefully I'll have some good news report in a couple months. Michael: Good. Emil: That's my story. Michael: Well, I want to come back something that you said a meal in that you said the communication was so poor. And if we asked the property manager how their communication was with you, they might have said, Oh, it was great. It was super onpoint. And so I think expectation setting is so huge on the front end, because you might think one thing is good. And they might think something entirely different is good. And so asking, Hey, if I send you a text, email, voicemail, how long should I expect before someone returns that, and if they say, three days and you're thinking it should be two hours, there's a big misalignment there. And so you want to make sure that everyone's on the same page to begin with. And again, just lessons learned from things going south quickly. And so asking those questions, we put together that that property management questionnaire as part of the restock Academy and talking through Hey, what are your expectations of me? And what are my expectations of you? Let's have this out on the front end. So that way we're nobody is having unmet expectations. Emil: Yeah, that was the follow up conversation I had with a property manager that I mentioned, but it's it was bad, Michael: It didn't go anywhere. Emil: They're not going to change their nickel and diamond. You know what I mean? Like the way they charge their owners, so I was like this isn't gonna work for me. Michael: Yeah, makes sense. Tom: Especially once it's already the ship has left the dock and you're already like you know, you might you might feel like you have a little bit more negotiation power up front you know in talking about before but once you're totally cool Michael do elaborate a little more on on your your experience. Michael: Yeah, I'd be happy to I just I love the transportation analogies you know that building a plane in the air the trend of the track ship ship leaving the docks to all these trains and automobiles, man. Tom: Dogs! Michael: Yeah, dogs! Tom: You know, Michael, everybody, everybody has different learning styles. So you just got to like blast out. You know, a lot of just in analogies. Michael: Pepper, spray, pepper, spray everything! Tom: Now using weapon analogies? Michael: I definitely did me to say pepper spray. The expression is definitely pepper. But for stuff in there. Tom: You're getting it. You're getting it. Go ahead Michael shoot from the hip. Michael: Like I was saying so things started going being weird with this property manager day one at close. When I called him before I hired the property management company. It was always great. He was always happy to hear from me. We had great conversations. He was a sharp guy. And then like as soon as I hired him, it felt like every time I picked up the phone and call him and he answered he was like, What? Like, oh my god like just him talking to me was so exasperating, and it just he just like didn't want to be on the phone with me. And whether that was because I'm a bit like Emil on that, before I let somebody run with a property, I'm gonna make sure that they're doing what they say they're doing. And so I'm gonna over communicate and probably be overbearing, but that's what I'm paying them for. And so I want to make sure that things are getting done, they haven't earned the right to, to run freely yet. So I was being very overly communicative. And I was trying to make sure things and repairs were getting done in a timely manner, but on the account making sure that things were checking out. And so it just got to a point where he was just like, so fed up with me that he basically handed me off to his wife We also worked with, and I was only communicating with her. And she was lovely. She was wonderful to work with. And she never made me feel like I was a pain in the butt by calling them and so she was very communicative. So that was better. But then I just started seeing these bills, kind of like Emil like nickel and dime bills, and they were adding an overage on to the utility bills that they were paying for me. And I was like, Where is this in your contract? And they were like, Oh, yeah, it's not we'll refund that can't just start charging people for something because you feel like it all of a sudden on a whim. And so they're like, Oh, yeah, okay. And then they couldn't get the rehabs done that I needed. And they were just fumbling all over the place. And they kept losing keys and had to go put it in a new lockbox. And it was just like, so many things that were really odd in and of themselves, but then compiling them onto each other, just made for a really bad fit. So just like Emil, I called him and I was like, Hey, man, I just don't think this is like working out. Like this just isn't a good fit. So they're like, yeah, we agree. I was like, Okay, I thought you might, so I was able to go to a new one. And actually, I was the whole time doing research to find a plan B, to find a backup because I had a feeling it wasn't gonna work out long term. And I couldn't find anything. So I was just constantly complaining to my agent actually ended up convincing him to start a property management of his business. So I just took all my units that he had sold me and moved them right over to him. And he knew them fairly intimately, because he sold them to me. So that was a really great fit. And so that was a really lucky scenario when I was able to transition fairly quickly and relatively seamlessly, because he was already aware of the situation. But yeah, it was funny when I was like, yeah, it's not a good fit. Like, yeah, we agree. It's like cool. The feeling's mutual. Then Tom, like to your point, the final kick in the pants, things were going great. I transitioned, I was done. I was gone. Literally like 12 to 13 months later, they emailed me and they're like, Hey, you still owe us some money. We were going through our accounting and found this so I was like, You got to be kidding me. I was like, You know what, let's just call it even. I'm sure you owe me some money, too. Let's just call it like, Okay, that sounds good. Like, who are you, like such nerves? Are you serious? Yeah. It was ridiculous. Tom: So the phone calls? I think for some people, there could be a little bit of anxiety and having that type of a call. Did you do anything to kind of like pump yourself up for it? Or, like just kind of general psychology on going to those.. Michael: I had my brother slapped me in the face. Tom: Yeah. Throw water in your face there. Michael: No, I think I sent an email prior just like hey, kind of prefacing, I wanted to have this conversation. So it wasn't so out of the blue kind of a thing. So that that helped a bit like sticking to your guns and knowing like the facts and knowing why it is or isn't working. And kind of like Emil said just not nitpicking them. Like you did this you did that. Just saying like, hey, it's not working out. It's not a good fit. How do we make this transition smoothly work for everybody? Because the last thing you want to do is burn bridges or make trouble for them. So that make trouble for you. It just, you know, try to make it a cleaner break as possible. Emil: Yeah, I had the exact same reaction when I sent the emails to the owner. He's like, totally, you know, we're not a good fit for everyone. And vice versa. It's not as hard as you think it's gonna be like, sometimes if, you know, you're having a hard time with them. They're having a hard time with you. Tom: Yeah, I remember the first time like, needing to, like, let an employee go, it was like, he was like, not surprised. I was like, yep, makes sense. All right, I'll see you later. Like, I'm like, kind of like, building up like, oh, man, this sucks so bad. But it's like, you know, I think like with with property managers and whatnot, like any types of those kind of situations, it's like, it's not a surprise and feel like it's a it's like a known, you know, yeah, known things. Michael: That says a lot of positive things about the relationship up to that point, versus if somebody is totally surprised and totally caught off guard. That means that you as an individual didn't do a good job communicating. Emil: Yep. Michael: They shouldn't be caught off guard. And so I think that that's an important takeaway, too, is to not let it get to a point where you're like, oh, pulling out your hair. Oh my god, I have to end this if you haven't done anything to try to mitigate it up to that point. So having conversations asking questions doing you know, trying to be proactive about it trying to solve those issues before you have to fire someone is a good use of time versus them making one slip up and saying oh, they're fired not even trying to correct it. I think there could be some middle ground there. Tom: Really lovely flow on this episode where it's like circling back to like, you know, I don't know you like kind of mapped out the discussion points, just, you know, try and doing everything you can to prevent it before it needs to Sorry, just commenting on my appreciation of the the flow of the episode. Michael: That's good flow. It's good flow. Tom: Yeah, I mean, just like continuing that good flow that I broke up a little bit. Yeah, doing what you can upfront to save the relationship. The grass isn't always greener. I had a friend who was didn't get responses like immediate responses on communications, and we've talked about this before, like some property management businesses. Like the expectations might need to be a little bit adjusted, like if you're expecting to get responses like on the hour, or even like, within the same day, like sometimes depending on the type of communication, you need to be okay with a little bit of a delay. And when I say that, I mean, like, you know, like a day or two, like business days. But if it's something that's minor, like, don't get yourself, like overly worked up on communications, it's just a little bit longer than you might expect in your like, normal day to day job. Michael: I think it's just around expectation setting. Tom: Yeah. Michael: And so asking the question, hey, if I email you, when should I expect your response? And that way, if they say 24 hours, and you don't hear from them in 48, okay, well, now you can start to get a little bit frustrated and do some follow up. But if they say 48 hours, and you're wanting a response, and 24, maybe that's more of a conversation about well, how you work versus how they work and how you can both work effectively together. And then also asking them how they prefer to communicate text, email, voice, you know, call, and then reconciling that with how you best communicate and seeing if there's some harmony there. Because if you're expecting all the email communication, they're only expecting to call the phone, again, that that's misaligned expectations. And that creates a lot of friction. So just having the honest conversation upfront and not feeling bad, when you say, Oh, it's not going to be a good fit, like you said, Tom, not every company is going to be a good fit. And so don't worry about I don't wanna hurt their feelings or that kind of thing, you need to make sure that it's going to work for you and eight to make sure it's gonna work for them, they have no problem dropping you as a client, so don't feel bad about dropping them as a client. Emil: Solid. Before we wrap this one up, you guys have any final tips for people as they're thinking about property managers, firing, hiring, whatever it may be, especially as a remote real estate investor? Michael: Don't skimp on the hiring process. I mean, really go through the motions as best you can, if you have the time. And really, I think that's where a lot of time, energy and effort should be spent. And then also, on the back end, don't wait too long to fire, I think I probably did Emil, it sounds like you may have to give in your three months, maybe, maybe not. But I think that a lot of people try too hard to salvage the relationship. And that's kind of the balancing act. And everybody, it's gonna be different everybody personally, but again, don't wait too long, because that's an easier bandaid to rip off sooner rather than later. Don't mistake that to hear he say, oh, fire somebody immediately. That's not what I'm saying at all, I think you should give people an appropriate amount of time, but just don't hope it's going to get better all on its own, I guess would be my last piece of advice. Tom: My final thing I'll say is, you know, these types of relationships are a two way street. Like, you know, Don't be a jerk, I would say like over communicate, people like doing things that they like to work with. So book recommendation, How To Win Friends and Influence People. I know, you're the customer, and they're your client, but it goes a long ways, especially when these people are making decisions every day related to your property. If they say, Oh, this is Tom's property, like he's great, let's make sure we do a great job. You know, like not being a jerk. And like being a genuinely nice guy that over communicates open, honest, constructive, all that good stuff goes a long ways. So you know, hopefully, you don't get to the point where you have to fire the person, the property manager, but if it does, that's okay. It's not written in stone, but be a good partner on the other side, that would be my final tidbit. Michael: And just to piggyback off that, every year, I say my property manager gifts around the holidays, and just let him know I'm thinking of them and to say thank you. So I think help just to your point, Tom be a nice person and make them want to do good for you. Emil: Solid. I got two I’ve written down here. Have the hard conversations just because they're gonna mess up, we all mess up right? You're gonna maybe mess up as the owner you could have a poorly communicated with my property manager realize I grilled them for something that didn't need to happen. So just know that there's gonna be ups and downs, have the hard conversations, if you need to do a reset, that's just part of it, dealing with the property manager, it's not going to be hands off always. And then something I'm trying to incorporate now is I want to get recommendations from other remote real estate investors and local investors. I want to know they have a good footprint locally, like multiple people in the area are recommending them right. They have a good reputation. And then I also want to know a couple other remote investors, right? Because we have different challenges being remote. We want to know that like they're doing good by other remote investors who aren't in the area. So that's kind of something I'm trying to incorporate as I look for new property managers. Michael: That’s smart. Emil: Alright, with that, let's end it here. Thank you all for listening to this episode. Again, leave us a review or rating. We'll give you a future shout out on an episode. And happy investing. We'll catch you on the next one. Happy investing. Tom: Happy investing!